Amit Bhardwaj next wants to take his cryptocurrency MLM scheme international

Grand Hyatt, Sheikh Rashid Road, Dubai, November 9, 2017, 3 pm: There’s a queue building up to enter the splashiest party in town: GBC Ultra Miners Summit, a bash for top investors in GainBitcoin, a dodgy but popular cryptocurrency investment scheme with roots in India. Parvendra Singh Shahoo, a businessman from Nanded in Maharashtra, is in the queue but doesn’t have the right identification and password to go through. The bouncers ask him to step aside.

A multi-level marketing scheme that promises off chart returns by mining and investing in Bitcoins (BTC) and other cryptocurrencies, GainBitcoin attracted more than 100,000 investors, by its promoter Amit Bhardwaj’s own boasts. But, as news of undelivered returns started surfacing early in 2017, fewer and fewer new investors came into the scheme making it difficult for Bhardwaj and team to service their promise of 10% monthly returns. Bhardwaj switched payouts from Bitcoins, which has appreciated more than 10 times between April 2017 to date, to an in-house token called MCAP with predictions that its price would grow 20-fold. That promise has remained just that – MCAP is at $0.61 today versus the $5.78 it was listed at – leaving most GainBitcoin investors in the lurch.

Shahoo, who calls himself “a fearless Sikh”, was one of them and had flown into Dubai just for the event. Denied entry to the GB Ultra Miners Summit at the Dubai Hyatt, he tried to look for Bhardwaj. He didn’t spot the slightly-built GainBitcoin topman but managed to buttonhole Dr Ashish Dabas, the flashy marketing frontman for Bhardwaj in recent months. Dabas, a dentist by qualification, relented and waved Shahoo through.

But, before the bouncers let him in, Shahoo was asked for his mobile phone. All the other attendees were also depositing their phones in lockers and Shahoo did, too, not wanting to create a scene.

Bhardwaj, Shahoo recollects, walked in late into the event around 6 pm. Taking the stage, he asked the audience, “What do you do when your computer crashes?” He waited for few answers from the crowd before answering his own question. “He said ‘You reboot the computer. And, that is what we are going to do with GainBitcoin today,’” Shahoo tells FactorDaily in a phone interview.

According to Shahoo, Bhardwaj left the event around 6:30 pm saying he wanted to take rest – he announced last August that he had undergone a renal transplant – and didn’t return. As the evening wore on, the attendees mixed among themselves and Indian as also international GainBitcoin executives. As canapes and snacks floated around, the Bollywood actresses made appearances and belly dancers entertained the Bitcoin guests.

Shahoo, who got to know of Bhardwaj through a friend (the friend and Bhardwaj were classmates in a Nanded engineering college), was clear he wanted time with the GainBitcoin promoter to get some queries answered.

He managed to get an appointment with Bhardwaj at his 80th-floor apartment at Elite Residence in Dubai’s posh Marina district. He had carried some ‘prasad’ from the Nanded gurudwara as blessings for Bhardwaj’s health but was in for a rude surprise. When the conversation came to Shahoo’s investment, Bhardwaj was cold and distant directing him to his uplink – the person who enrolled him in the GainBitcoin scheme. “Ask about it with your uplink, not me,” Bhardwaj said, according to Shahoo.

GainBitcoin’s new avatar

Bhardwaj and GainBitcoin did not respond to a request for comment, as he has not done in the four stories that FactorDaily has written about him. As in the past, our reporting in this story covers multiple sources (some who want to stay anonymous), documents and communications sent from GainBitcoin, and tracking breadcrumbs online.

Bhardwaj is arguably India’s biggest cryptocurrency miner and investor with links to Bollywood stars, advertisements in mainstream media and airline travel, and even an electronic book. He is said to control 0.7% of hash power – as computing power in mining BTCs and other cryptocurrencies is referred to – in the Bitcoin universe via a group company, GBMiners. Starting his career as a software developer at storied IT services company Infosys in June 2004, according to his LinkedIn profile, Bhardwaj has been dabbling in BTCs and cryptocurrencies for nearly five years now. In a March 2017 video, he is seen telling potential investors that the GainBitcoin assets are more than Rs 1,200 crore.

A quick look at Bhardwaj’s empire that we first wrote about in “The curious story of Amit Bhardwaj and how he made millionaires and fools of Bitcoin investors” in August last year:
GBMiners houses Bharadwaj’s cryptocurrency mining operations, which the company says is run from China.
GainBitcoin is the company through which Bhardwaj brings on board investors by selling them cloud mining and Bitcoin investment plans, which they are told is powering GBMiners’ mining operations and, in turn, driving returns. These investment plans were offered in the form of Bitcoin mining contracts which, according to early investors, gave out monthly payouts in the form of Bitcoins, in lieu of the investments made.

Typically, potential investors are introduced to GainBitcoin through seminars and webinars where attendees are introduced to Bitcoins and told how they can make money by investing in the Bhardwaj company.

Shorn of marketing spiel, GB21 works exactly like earlier schemes of GainBitcoin. The recently announced program is another cloud mining scheme with 365-day contracts starting from $100 all the way up to $500,000 that offer around 200% returns. According to the GB21 website, investors are promised a payout of 10% for the first four months, 15% for the next four months and 25% for the last four months.

A GainBitcoin investor from Mumbai is sceptical. “When the company is not able to keep up its earlier promise on their contracts, there is no way these (new) returns are possible,” he says, asking not be named because some of his contracts are still live with the Bhardwaj company.

Shahoo also predicts a similar fate for the new plan with the difficulty in doubling an investment in a year especially with the increase in difficulty in mining cryptocurrencies.

Some of that scepticism comes from the experience of the last two months. When GainBitcoin announced its reboot plan in November, the company had said that the plan will raise the value of the MCAP token, which according to it, had been facing the brunt of profit-taking by greedy investors. But the token’s price has only dived further from the November 1 level of $1.77 to the current $0.61.

Selling GB21 to the unaware

“GainBitcoin plans are no more being sold here because people are beginning to talk about . Now they (GainBitcoin) are targeting new investors in South East Asia and Eastern Europe with the GB 21 plan,” says Yuvraj Pawar, a businessman from Pune who has been an investor in GainBitcoin since February 2017.

In a video published in October 2017, just before the reboot plan was announced, Dabas, the GainBitcoin marketeer, along with Bhardwaj talks about plans to start a WhatsApp group for Korean investors and also introduces a promoter handing the Mexican and Chinese markets.

In what looks like a promotional video for GB21, Dabas is seen announcing plans to spend millions of dollars in advertising GB21 across international airports and cities. “We will spend Rs 1,000 crore on marketing… Today to improve the value of a cryptocurrency, you only need to increase its presence so that more people know about it. For that, we will increase its publicity. Within January (2018) we will put up our hoardings at most big international airports…also in media and events we will promote MCAP,” he is seen saying.

Shahoo, the Nanded investor, says he’s been told by a top-level GainBitcoin investor that the company plans to promote the MCAP token and GB21 plans at new places where there has so far been no awareness about GainBitcoin. This, the company believes, will bring in new demand for MCAP tokens and raise its price. When that happens, goes the pitch, Indian investors holding MCAP tokens will be able to reap the benefits.

With Amit Bhardwaj operating out of Dubai and cryptocurrency markets still bullish despite the current meltdown, selling to international investors may be easier.

But GainBitcoin investors aren’t giving up. Gagan Joshi, a Dubai businessman who invested in GainBitcoin in December 2016, plans to alert international customers about Bhardwaj’s activities and plans. “I’m in the process of getting Polish, Russian, Indonesian and Vietnamese speakers to make videos about GainBitcoin and Amit Bhardwaj so that they will also be aware of his schemes and activities,” he adds.

Bengaluru-based cybersecurity and cyberlaw expert Na Vijayashankar feels that such scams hinge on investor greed. “Also, the fact that there is no regulation and legality over Bitcoin in India makes it easier for such Ponzi schemes to operate without any repercussion as victims can’t make proper complaints with authorities,” says Vijayashankar, who compares the situation to the reluctance of a black money investor to approach the police on a deal gone wrong.

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[Update: The typo in the first line has been corrected from 2019 to 2017]

Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners, Blume Ventures and Vijay Shekhar Sharma among its investors. Accel Partners is an early investor in Flipkart. Vijay Shekhar Sharma is the founder of Paytm. None of FactorDaily’s investors have any influence on its reporting about India’s technology and startup ecosystem.